Hammered by Auditors

A DRAFT AUDIT OF L.A.’S DEPARTMENT of Building and Safety exposes deep cracks in the foundation of the pivotal city agency whose leader already faces a contempt-of-court hearing in Orange County and questions about selective code enforcement.

City Controller Laura Chick’s preliminary audit, obtained this week by the L.A. Weekly, shows that the regime of longtime building-department general manager Andrew Adelman is plagued by improper oversight of building inspectors, poor enforcement of orders to correct building deficiencies, ineffective inspections, manipulation of inspection statistics to create a perception of efficiency, lack of training and certification of inspectors and a heavy backlog of inspections and open permits. Auditors found “inconsistent and arbitrary” discipline, even when inspectors were caught making “false or misleading statements, or misrepresentations in writing.”

“The Department is unable to monitor [inspection] activities in a way to ensure they are effectively meeting their mission,” the draft says of the inspection bureau.

In the Code Enforcement Bureau, headed by chief enforcer Dave Keim, the draft audit identifies 330 of 15,000 unresolved cases that are classified as “high-priority or hazardous conditions.” Auditors have also identified a failure of code inspectors to meet training requirements mandated by state law and a lack of oversight of employees hired to ensure that buildings are safe. More than 60 of the 134 code inspectors hired between 1996 and 2003 fail to meet certification requirements under state law. Policy and procedure manuals are incomplete and the department has no specific criteria to determine the appropriateness of orders to abate, according to the draft audit.

“Performance measures focus on the closure of case files rather than measuring changes to neighborhood safety, appearance and economic stability,” the draft audit states.

Adelman took over the building department in 1997 under then-Mayor Richard Riordan, who recently referred to him as a “godsend.” Adelman’s mandate was to streamline the permit process, improve communication with property owners and city officials, and encourage development. The aggressive construction and development culture in Los Angeles since then has been matched by an aggressive attitude in the front office of the building department, according to numerous employee lawsuits filed in Superior Court. The lawsuits, some of which have been settled or dismissed, have charged that Adelman bullies and demeans employees, and that his top officials — executive officer Ray Chan, Robert Steinbach, spokesman and head of the grading division, and Keim, chief of enforcement — have manipulated civil-service rules to promote cronies and push aside detractors. In one lawsuit that settled, an employee alleged that Adelman shoved him in the chest twice. In a pending lawsuit, personnel director Gina Tervalon has filed declarations with the court alleging that Adelman instructed subordinates to mislead city officials about the preselection of promotions.

Adelman has declined to comment. His top officials say the lawsuits and the perception of brutality surrounding him result from the griping of a “few disgruntled employees.”

On Monday, Julie Butcher, general manager of Service Employees International Union Local 347 — which counts 400 building-department inspectors among its members — came to his aid. Butcher said that Adelman has simply followed orders from City Hall in running the department, and that his vision is the city’s vision. “He has done everything the city has asked him to do: build, streamline, stop the flow of complaints and be responsive to the mayor and the City Council offices.” Butcher disputed recent news reports suggesting that building inspectors are doing incomplete or insufficient inspections. “It’s complicated work. They are proud of what they do.”

On Tuesday, Councilman Ed Reyes said there is a need for more employees, and that a red-hot real estate market has put building inspectors in a crossfire between developers and stakeholders in various communities. “There is always room for improvement,” Reyes said. But the draft audit raises questions about whether employee allegations and development controversies are mere symptoms of deeper dysfunction. Controller Chick’s auditors have found more than 140,000 open building-permit applications that have not been formally closed, some with outstanding orders to comply with city law. They found that inspectors routinely eliminate rescheduled calls for inspection so they can avoid being classified on activity reports as “rollover calls,” which serves to lower inspection-completion ratios. Since 2000, rescheduled calls increased from 51,359 to 74,584 — an increase of 45 percent — while rollover calls fell from 3,312 to 756 — a decrease of more than 75 percent.

In addition, 51 percent of inspection customers who were surveyed said that inspections took between 15 and 30 minutes, risking a “compromise [of] the quality of inspections in order to focus on meeting the department’s time-frame requirements.” More than 30 percent of commercial and residential inspectors said they compromise quality because of time constraints. In terms of oversight, auditors found no policies for monitoring by supervisors or for follow-up inspections. “Field staff are provided very little supervision and oversight by more experienced senior-level staff members,” the draft audit states.

The building department is backlogged with state-mandated inspections, according to the draft audit. As of April, the department has 3,900 out of 21,000 backlogged elevator inspections and is forgoing more than $1 million in inspection fees. It has 6,800 out of 21,000 backlogged inspections of heating pumps and 4,794 out of 21,694 backlogged inspections of seismic gas shut-off valves. Of 10 inspector’s files that were reviewed, auditors found that none of them contained documentation that staff was trained for this type of work.

On the code-enforcement side, “the department does not present a complete picture of its needs, opportunities for improvement or accomplishments,” the draft audit states. The code-enforcement bureau does not monitor the severity of its orders, the reasons cases remain unresolved, the types of compliance that are required or the resources needed to enforce the code. Auditors found that 43 percent of inspectors sampled — 15 out of 35 — failed to meet state-mandated training requirements, and that 91 percent — 32 out of 35 — failed to meet the department’s own guidelines for 15 hours of training per year.

While “no one in the Department monitors training or holds inspectors accountable,” according to the draft audit, a survey of 427 code inspectors revealed that “20 percent do not feel they have the resources to do their job well,” and “75 percent suggested they spend more than 50 percent of their time [on] administrative tasks.”

The City Administrative Office has reported to the mayor that the building department has increased revenue from $74 million to $112 million in recent years, but that it suffers from staff burnout, customer dissatisfaction and increased liability risks related to insufficient safety inspections. The department generates fees up front to pay for services, independent of the city’s general fund, yet auditors found deficiencies in accounting for receivables and customer refunds.

Auditors found $470,000 in outstanding credits to consumers who were overcharged. Although over 90 percent of permit and inspection fees are collected up front, the building department bills separately for inspection of elevators, heating pumps, and auto-repair and junkyard shops. As of March, the department has $16.7 million in outstanding receivables, with $12.3 million of that amount — 73.6 percent — delinquent by more than a year.

They also found more than $2 million in outstanding bad checks, with no check-verification system in place. Other city departments owe the building department $1.06 million, of which 50 percent is past due by more than 120 days. In terms of quality control, the response to negative feedback is “ad hoc,” the auditors found. None of the building department’s computer systems are linked together, the draft audit states.

WHILE THE DEPARTMENT MAY SEEK to resolve its troubles through increased staffing, an inconsistent pattern of code enforcement, directed at the highest levels of management, calls into question its leadership. In April, the Weekly reported that influential land banker Richard Meruelo, the largest private landowner in downtown L.A., tore down four industrial buildings without permits. Witnesses saw city vehicles with occupants observing the demolition of the warehouses at 1000 Alhambra Ave. and 1060 N. Vignes St., but nothing was done to stop it. Building-department inspector John Cordin photographed the aftermath, according to documents presented at a hearing in May, and orders were issued to Meruelo to comply with city permit laws. Yet no enforcement action was taken until news reports surfaced. (South Coast Air Quality Management District is conducting a criminal investigation to determine if toxic substances were improperly removed.)

Then the department went to the opposite extreme — at Vignes Street and another Meruelo property.

Last week, executive officer Ray Chan informed Meruelo that he was barred from development on the Vignes property for five years. The “scorched earth” action is rare. It has been invoked three times since it was adopted in the late 1980s, according to Meruelo’s lawyer, Timothy Neufeld — each time when buildings of historic or cultural value were destroyed. Meruelo has vowed to appeal, pointing to the city’s justification of its refusal to enforce the scorched-earth ordinance against the University of Southern California for demolishing a building at 921 W. 30th St. without a permit, “precisely because the structure in question was not an historic or culturally significant building.” In its refusal, the city relied on the example of a developer who razed the Giese House on Bunker Hill in 2001, resulting in a scorched-earth action and protracted legal battle. “Last week’s decision is inconsistent with just about every other case or action taken in the past by the building department,” Meruelo spokesman Michael Bustamante said on Monday.

At another Meruelo property, building-department documents show years of unenforced orders — until just recently. Following news reports of persistent sprinkler, ventilation, fire-door and electrical violations, inspectors recently descended upon 1318 Seventh St., adjacent to the Alameda Produce Market, and issued compliance orders on 10 separate violations.

Meanwhile, in a case that has been removed to Orange County because it involves two Los Angeles judges, Adelman faces contempt charges for failing to follow a judge’s order and refusing to enforce the setback requirements at 909 Greentree Road, in the Rustic Canyon area of Pacific Palisades. In an attempt to avoid Adelman being fined or threatened with jail time, the city, after digging in its heels for years, recently revoked building permits on a 6,500-square-foot addition to a 2,000-square-foot home, and has asked the judge to reconsider his threat to hold Adelman in contempt. The contentious legal battle has raised questions as to just how the city — and Adelman — have gone so far out on a limb to protect the building rights of a single property owner, whose lawyer has now indicated he could sue the city if the owner is forced to tear down the addition to his dream home after years of city approval of his plans.

“They’re running scared,” a department veteran said of the building department’s top honchos, who have spent a lot of time behind closed doors recently. “If it becomes enough of an embarrassment or a political liability, something will have to be done.”

Get the Weekly Newsletter

Our weekly feature stories, movie reviews, calendar picks and more - minus the newsprint and sent directly to your inbox.